State of NORTH CAROLINA ex rel. Roy COOPER, Attorney General, Plaintiff-Appellee, v. TENNESSEE VALLEY AUTHORITY, Defendant-Appellant.
No. 06-2131
United States Court of Appeals, Fourth Circuit
Argued: Oct. 31, 2007. Decided: Jan. 31, 2008.
515 F.3d 344
New York; Maryland; South Carolina; California; Colorado; Connecticut; Delaware; Illinois; Iowa; Maine; Massachusetts; Mississippi; New Hampshire; New Jersey; Ohio; Oklahoma; Rhode Island; Vermont; Wisconsin; Washington, D.C.; American Lung Association; American Thoracic Society, Amici Supporting Appellee.
IV.
For the foregoing reasons, the judgment of the district court is
AFFIRMED IN PART AND REVERSED AND REMANDED IN PART.
Before WILLIAMS, Chief Judge, and NIEMEYER and SHEDD, Circuit Judges.
Affirmed by published opinion. Judge SHEDD wrote the opinion, in which Chief Judge WILLIAMS joined. Judge NIEMEYER wrote an opinion concurring in part and dissenting in part.
OPINION
SHEDD, Circuit Judge:
In 1933, Congress created the Tennessee Valley Authority (the TVA) in the
The TVA moved to dismiss North Carolina‘s suit, arguing that it is barred by (1) the discretionary function doctrine, (2) the Supremacy Clause, and (3) the holding of Ferris v. Wilbur, 27 F.2d 262 (4th Cir. 1928). The district court rejected each of these arguments and denied the motion to dismiss. The district court then certified its decision for immediate appeal pursuant to
I
The TVA first argues that this suit is barred by the discretionary function doctrine. The discretionary function doctrine precludes a suit in tort against the United States, its agencies, or its officers where (1) the challenged conduct involves an element of judgment or choice, and (2) that judgment is of the kind that the discretionary function exception was designed to shield, i.e., ... the challenged action is based on considerations of public policy. Suter v. United States, 441 F.3d 306, 310-11 (4th Cir. 2006) (internal citations omitted). This exception from suit for discretionary acts generally arises in the context of the Federal Tort Claims Act (FTCA), where Congress provided that the United States’ waiver of sovereign immunity does not extend to [a]ny claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.
Congress has waived the sovereign immunity of certain federal entities by including in the enabling legislation provisions that they may sue and be sued. Loeffler v. Frank, 486 U.S. 549, 554 (1988). In contrast with other waivers of sovereign immunity, sue-and-be-sued waivers should be liberally construed. Id. Thus, when Congress establishes such an agency, authorizes it to engage in commercial
Under these principles, the TVA‘s sue-and-be-sued clause stands as a broad waiver of sovereign immunity which, absent a showing to the contrary, would encompass North Carolina‘s claims. The TVA, however, asserts that a discretionary function exception grounded in the constitutional concept of separation of powers renders this lawsuit inconsistent with the constitutional scheme. To support this position, the TVA looks to our holding in McMellon v. United States, 387 F.3d 329 (4th Cir. 2004) (en banc).
In McMellon, we examined the question of whether a discretionary function exception bars a lawsuit filed against the United States under the Suits in Admiralty Act (SIAA). After noting that the SIAA does not contain a statutory exception from suit for discretionary functions, we concluded that such an exception nonetheless exists by virtue of the constitutional doctrine of separation of powers. We based our conclusion on the fact that the Constitution does not allow judicial regulation which might prevent[] the Executive Branch from accomplishing its constitutionally assigned functions. Id. at 341. We likewise found that under our constitutional system the Judicial Branch [may] neither be assigned nor allowed tasks that are more properly accomplished by other branches. Id. We therefore held that the courts may not assume the power to regulate, through the medium of tort liability, the manner in which the Executive Branch exercises the discretion which the Constitution assigns to it. Id. at 343.
We do not believe that the constitutional concerns underlying our decision in McMellon are present here. The TVA is a corporate entity, separate and distinct from the Federal Government itself. Pierce v. United States, 314 U.S. 306, 310 (1941). Thus, the TVA maintains a separate corporate identity, a separate legal staff, and a separate headquarters. TVA v. EPA, 278 F.3d 1184, 1192-93 (11th Cir. 2002), vacated in part on other grounds, 336 F.3d 1236 (11th Cir. 2003). The Attorney General is prohibited from representing the TVA in a legal proceeding unless expressly requested by the TVA to do so. Pub.L. No. 98-181, § 1300 (1983), 97 Stat. 1292.2
In addi-
Congress’ statements with regard to the TVA lend support to its independence. When creating the TVA in 1933, Congress indicated that it intend[s] that the corporation shall have much of the essential freedom and elasticity of a private business corporation. H.R.Rep. No. 73-130 at 19 (1933). Even more telling, Congress exempted the TVA from the FTCA, see
This degree of independence which the TVA possesses in large part alleviates the constitutional concerns which we recognized in McMellon. A lawsuit against the TVA is not a suit against the United States itself or one of its agencies subject to the direct executive control which is granted to the President by Article II of the Constitution. Rather, a suit against the TVA is against a governmental agency in[] the commercial world, Loeffler, 486 U.S. at 555, that is governed by an independent Board of Directors,
Even were the TVA more tightly linked with the Executive Branch, this case would not conflict with the principles recognized in McMellon. In this case, a judicial decision on the lawfulness of the TVA‘s plant emissions does not strip the TVA of its authority to execute its statutory duties. At most, it could require the TVA to take into account and to abide by certain air quality standards when operating its coal-fired power plants. As the district court recognized, [t]he Executive‘s ability to de-
Accordingly, we conclude that this suit does not implicate the separation-of-powers concerns which led to our decision in McMellon. We therefore hold that the broad waiver of sovereign immunity effected by the TVA‘s sue-and-be-sued clause is not restricted by a discretionary function exception in this case.4
II
We next turn to the TVA‘s contention that the Supremacy Clause bars this lawsuit from proceeding. By virtue of the Supremacy Clause, the activities of the Federal Government are free from regulation by any state. Mayo v. United States, 319 U.S. 441, 445 (1943). However, Congress may waive the protections of the Supremacy Clause and authorize state regulation of federal entities where the waiver is clear and unambiguous. Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 180 (1988). At issue here is the waiver of Supremacy Clause immunity which Congress included in the Clean Air Act (CAA),
The CAA provides that federal facilities such as the TVA:
[S]hall be subject to, and comply with, all Federal, State, interstate, and local requirements, administrative authority, and process and sanctions respecting the control and abatement of air pollution in the same manner, and to the same extent as any nongovernmental entity.
In assessing the TVA‘s argument, we look first to the literal and plain language of the statute. Markovski v. Gonzales, 486 F.3d 108, 110 (4th Cir. 2007). Because the CAA does not define requirement, we must accord the term its ordinary, contemporary, common meaning, absent an indication Congress intended [it] to bear some different import. DIRECTV, Inc. v. Nicholas, 403 F.3d 223, 225 (4th Cir. 2005). In common parlance, requirement means [s]omething that is required; something obligatory. American Heritage Dictionary 1050 (2d coll. ed.1991). Require, in turn, means [t]o impose an obligation on; compel. Id. Nothing in the definition of requirement restricts the term‘s meaning to objective, quantifiable standards which must be met. Nor does anything in the CAA indicate that Congress intended that the term bear the narrow meaning the TVA suggests. The plain language of the CAA, then, does not support the TVA‘s position.
The TVA‘s reading of requirements likewise finds no support in case law, for the Supreme Court has held that state requirements include common-law standards. In Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992), the Court considered the reach of a preemption statute which provided that
No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this Chapter.
The phrase [n]o requirement or prohibition sweeps broadly and suggests no distinction between positive enactments and common law; to the contrary, those words easily encompass obligations that take the form of common-law rules. [State] regulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy.
Cipollone, 505 U.S. at 521 (plurality opinion) (internal citations and
Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), is similar. There, the Court relied on Cipollone when determining the meaning of another preemption statute which provided that no State... may establish or continue in effect any requirement which differs from the federal requirement. Id. at 503 (citing
In this case, the phrases all requirements and any requirement sweep at least as broadly as the no requirement and any requirement language at issue in Cipollone and Medtronic.7 The Cipollone and Medtronic Courts’ expansive construction of requirement and their unequivocal holdings do not support the TVA‘s preferred narrow reading of the term, and we see no basis for adopting a more limited definition here.8
In sum, the plain meaning of requirement and the Supreme Court‘s broad interpretation of the term foreclose the TVA‘s argument that the CAA does not
III
Finally, we turn to the TVA‘s contention that our decision in Ferris v. Wilbur, 27 F.2d 262 (4th Cir. 1928), bars North Carolina‘s cause of action. In Ferris, a private citizen sued the Secretary of the Navy in nuisance, seeking an injunction against the storage of weapons at a naval facility. We held that the suit must be dismissed because the use of government property [had been] authorized by Congress and [lay] within the discretion of the executive. Id. at 264. We noted that a contrary holding would permit the judicial department to interfere with the reasonable discretion of the executive. Id.
This cited language amply demonstrates that Ferris was an early case applying the discretionary function doctrine. Further, because there was no statutory discretionary function exception at issue in Ferris, our ruling necessarily rested on the constitutional concept of separation of powers. See id. (permitting suit to go forward would be contrary to our theory of government). As we have already concluded, this concept does not preclude North Carolina‘s suit against the TVA. Ferris does nothing to change this conclusion. Ferris was a suit against the Secretary of the Navy, an executive official under the direct authority of the President. As a result, Ferris raised many of the same concerns we recognized in McMellon but which are not present in this case against the TVA, an independent governmental entity. We therefore find Ferris to be inapposite and hold that it presents no bar to North Carolina‘s lawsuit.
IV
Based on the foregoing, we conclude that none of the arguments raised by the TVA prevents this suit from proceeding. Accordingly, we affirm the denial of the TVA‘s motion to dismiss.
AFFIRMED.
NIEMEYER, Circuit Judge, concurring in part and dissenting in part:
In this case, the State of North Carolina sues the Tennessee Valley Authority (TVA) under the North Carolina common law of nuisance to enjoin the way that the TVA operates its coal-fired power plants in other States, namely Tennessee, Alabama, and Kentucky. North Carolina alleges that the lawful emissions from the TVA‘s power plants in other States travel downwind and reach North Carolina airspace, where they damage human health and the environment in North Carolina. Even though such emissions are regulated by and in compliance with the federal Clean Air Act and State law at the location of the plants, North Carolina contends that the emissions, whether permitted under applicable statutory laws, nonetheless create a public nuisance under North Carolina common law.
The threshold question presented to us is whether the TVA, a federal agency, is immune from such a suit. Arguing that it is not, North Carolina points to waivers of immunity contained in the TVA Act,
The TVA was created in 1933, during the Depression, as a federal agency to implement major national programs and policies. And as the agency created to carry out the important work of the federal government that transcends any individual State‘s interests, it is constitutionally protected from State suits initiated by a State disagreeing with congressional programs and policies. In connection with the particular issues raised in this case, the TVA was authorized by Congress to employ available technology for the generation of power, including the very coal-fired generators that North Carolina complains about in this action. For decades, these generators have provided energy to a broad, multistate area of the country and, to be sure, have produced emissions that tend to pollute. But the emissions were a tradeoff inherent in the project created by Congress, and Congress made the governmental choice of providing the benefits given by the TVA at the expense of some clean air, even if clean air was an important policy of any given State. See Dalehite v. United States, 346 U.S. 15, 73 (1953), affirming, In re Texas City Disaster Litigation, 197 F.2d 771 (5th Cir. 1952) (en banc) (finding the TVA immune from suit over an explosion of ammonium nitrate fertilizer being shipped during World War II, based on the fact that the tortious conduct involved decisions balancing safety risks against cost and production schedule benefits of expediting manufacturing and shipping to accomplish foreign aid goals). If the old technology impliedly authorized by Congress from the beginning of the TVA can be updated or replaced to provide less pollution, the decision would have to be a federal decision based on a number of discretionary factors balancing the environmental risks with the economic viability of the program. But it cannot be for any one State to dictate to Congress or an agency that Congress creates how it must carry out its discretionary functions. Discretionary governmental decisions are protected from State intervention by the Constitution through the doctrine of separation of powers and the Supremacy Clause.
Against this incontrovertible background, I cannot conclude that in authorizing the TVA to sue and be sued, Congress intended to traverse separation of powers principles and authorize a State suit against the federal agency questioning the fundamental decisions of the federal government to create the TVA and build coal plants to provide energy and thereby inherently authorize some emissions that are within federal and state regulatory standards. Such a conclusion tends to stand the federal structure on its head,
For these reasons, I conclude that our decisions in McMellon and the other similar cases apply, precluding our finding that a federal statute authorizing the TVA to be sued but remaining silent on whether it could be sued for discretionary functions should amount to a waiver of immunity for making discretionary decisions.
The Clean Air Act,
Accordingly, I concur in the judgment but dissent from the rationale supporting that judgment to the extent it is inconsistent with what I have stated in this separate opinion.